The end of the 8109?

[AlbanyConsultant]

We've twice been told by banks in the last two weeks that they no longer are required to accept the Form 8109, and that all deposits must be done electronically (via ACH, most likely). The bank rep pointed us towards the Dept. of Treasury's website and irs.gov, but we don't see anything there to support their claim.

In our searching, we came upon dstortz.com, and this website of a CPA in Pennsylvania seems to agree with the banks we've spoken to. He even has a Form 9779 to get registered with EFTPS (Electronic Federal Tax Payment System) to make these payments.

So, the question is... they've got to be kidding me, right? Can they really make the little mom-and-pop stores with retirement plans with no computer access join the 21st century even against their will? Many of these plans don't even have accounts that you could ACH from!

Anyone seen anything like this? Thanks.

[JanetM]

Hmmm that is odd. Since when did the IRS change the rules on small employers/plans with deposits of less than $200k? Taxalmanac site update say IRS encourages EFT but it still allows coupons.

http://www.taxalmanac.org/index.php/Headliner_190

[Lori Friedman]

Taxpayers who aren't required to use EFTPS can still make bank deposits with Form 8109. But, the old-fashioned method does seem to be going the way of the dinosaur. First, as you mention, some banks are no longer willing to serve as federal tax depositories. Second, the IRS really encourages businesses to use EFTPS.

Certainly, little Mom-and-Pop businesses can continue to use Form 8109. Many taxpayers are very happy, though, after they make the change to EFTPS. The system's available 24 hours a day, and it's very simple to use. EFTPS eliminates the whole process of writing a payment check, getting it signed, going to the bank, and standing in line for service.

[Bill Presson]

Taxpayers who aren't required to use EFTPS can still make bank deposits with Form 8109. But, the old-fashioned method does seem to be going the way of the dinosaur. First, as you mention, some banks are no longer willing to serve as federal tax depositories. Second, the IRS really encourages businesses to use EFTPS.

Certainly, little Mom-and-Pop businesses can continue to use Form 8109. Many taxpayers are very happy, though, after they make the change to EFTPS. The system's available 24 hours a day, and it's very simple to use. EFTPS eliminates the whole process of writing a payment check, getting it signed, going to the bank, and standing in line for service.

If the only change was from writing a check to not writing a check, it wouldn't really be a big deal. But that's not (most of) the real world. The typical case is the 15 person balance forward plan with a single brokerage account. We have to go through hoops now to make tax deposits, with much thanks to a friendly bank for accepting the 8109's. The brokerage firm is no help and some even refuse to write checks to the bank to allow the employer to make the tax deposit!

[maverick]

In the instructions attached to the 8109-B (how to make deposits), it indicates that the coupon and payment can be mailed to "Financial Agent, Federal Tax Deposit Processing, PO Box 970030, St. Louis, MO 63197". The form I'm looking at is a "rev. 12-2002" version; not sure if the direct mail option has been removed from a more current version.

Some banks (even if the retirement plan sponsor is a customer) refuse to accept 8109-B's -- probably don't want to deal with the hassle of processing the forms.

[Sully]

I have my clients mail the payment and coupon to the St. Louis address. To date, it has worked fine.

[AlbanyConsultant]

I have my clients mail the payment and coupon to the St. Louis address. To date, it has worked fine.

That's what we're going to start advising, too. Thanks, everyone.